PENNIE ROPER, individually and on behalf of all others similarly situated, v. BIG HEART PET BRANDS, INC.
No. 1:19-cv-00406-DAD-BAM
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
December 30, 2020
(Doc. No. 13)
This matter is before the court on defendant‘s motion (Doc. No. 13) to dismiss plaintiff‘s complaint. (Doc. No. 1) A hearing on that motion was held on August 20, 2019. (Doc. No. 25.) Attorney Ronald Rothstein appeared telephonically on behalf of defendant and attorneys Michael Reese and Benjamin Heikali appeared telephonically on behalf of plaintiff and the proposed class. (Id.) For the reasons explained below, the court will grant in part and deny in part defendant‘s motion to dismiss.1
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Plaintiff Pennie Roper originally filed her complaint in Stanislaus County Superior Court on February 13, 2019. (Id., Ex. 1 (“Compl.“).) Therein, plaintiff alleges the following: Defendant Big Heart Pet Brands, Inc. has labeled and advertised a series of products (“Products“) with the representations “All Natural.” (Compl. at ¶ 2.) However, the Products allegedly contain non-natural, artificial, and synthetic ingredients including sodium tripolyphosphate (“STPP“), synthetic vitamins and minerals, citric acid, and lactic acid. (Id. at ¶ 4.) Plaintiff and other consumers relied on defendant‘s natural representations when purchasing the products and would have either not purchased them or paid significantly less. (Id. at ¶ 6.) At all relevant times, defendant made the natural representations because consumers “perceive all natural foods as better, healthier, and more wholesome.” (Id. at ¶ 22.) Defendant knew what representations it made about the Products and knew what ingredients were added to them since it “formulated and manufactured, or oversaw the formulation and manufacturing of, the Products and then listed all the Products’ ingredients on the packaging.” (Id. at ¶ 24.) The Products are governed by federal regulations that control the labeling of the Products, and some of the ingredients have been federally declared to be synthetic substances. (Id.)
Despite being misled, plaintiff would likely repurchase the Products in the future if the Products were reformulated to be free of the allegedly unnatural ingredients. (Id. at ¶ 33.) However, plaintiff will remain unable to rely on the natural representations in the future because she has no way of determining whether the Products would be free of the challenged ingredients. (Id.)
Plaintiff brings this case as a class action for all California residents who purchased any of the Products for personal, or household purposes. (Compl. at ¶ 35.) Based upon her allegations, plaintiff asserts seven causes of action, including: (i) Violation of California‘s Consumers Legal Remedies Act (“CLRA“); (ii) Violation of California‘s Unfair Competition Law (“UCL“); (iii) Violation of California‘s False Advertising Law (“FAL“); (iv) Breach of Express Warranty; (v) Breach of Implied Warranty; (vi) Intentional Misrepresentation; and (vii)
On March 29, 2019 this case was removed by defendant from the Stanislaus County Superior Court based on diversity jurisdiction (
LEGAL STANDARD
A. Motion to Dismiss Pursuant to Rule 12(b)(6)
The purpose of a motion to dismiss brought pursuant to
In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). It is inappropriate to assume that the plaintiff “can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways
B. Pleading Fraud Pursuant to Rule 9(b)
A complaint alleging fraud must also satisfy heightenеd pleading requirements.
Under
ANALYSIS3
A. Intentional Misrepresentation
Under California law, the elements of an intentional representation claim are (1) misrepresentation; (2) knowledge of falsity; (3) intent to defraud, i.e., to induce reliance;
Defendant argues that to properly allege an intentional misrepresentation claim “it must be ‘probable that a significant portion of the generаl consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.‘” (Doc. No. 13 at 18) (citing Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508 (2003)). Defendant cites to the decision in Hairston v. South Beach Beverages Company, No. CV 12-1429-JFW (DTBx), 2012 WL 1893818, at *4 (C.D. Cal. May 18, 2012) in support of the contention that whether a representation is likely to deceive is evaluated in the context of the advertisement as a whole and not based upon a single out-of-context phrase found in one component of the label. (Doc. No. 13 at 18.) Defendant further argues that plaintiff cannot plausibly “allege that a reasonable consumer would be deceived into believing that a product does not contain the very ingredients that are disclosed in the front-facing representation-at-issue.” (Id. at 19) (referring to the fact that the label on its product includes “with added vitamins, minerals & nutrients“). Defendant contends that plaintiff did not allege in her complaint that a reasonable consumer would be deceived by the added vitamins, minerals, and nutrients language and argues plaintiff cannot change her argument in response to its motion to dismiss. (Id. at 20.) Even if plaintiff could make this new argument, defendаnt asserts that “a reasonable consumer would not be likely to understand the label in such a strained manner.” (Id.)
Defendant also claims that its representation is entirely accurate because its packaging/description complies with the pet food guidelines of the Association of American Feed Control Officials (“AAFCO“). (Id. at 12.) Defendant notes that processed pet food is regulated by the California Department of Public Health (“CDPH“). (Id. at 16.) Defendant avers that when the CDPH reviews the common names and definitions of pet food ingredients not mentioned in the California Health and Safety Code regulations, it looks to the AAFCO for guidance. (Id. at 16) (citing
Plaintiff takes particular issue with the presence of the ingredients STPP, citric acid, and lactic acid in the Products. (Comp. ¶¶ 4, 19, 25.) Defendant counters that STPP, citric acid, and lactic acid all satisfy the AAFCO‘s definition of “natural.” (Doc. No. 13 at 7.) First, defendant contends that STPP is a mineral prepared by dehydration or calcination, both of which are processes deemed natural by the AAFCO. (Id.) Second, defendant contends that citric acid is a naturally occurring preservative produced by recovery from lemon or pineapple juice, by mycological fermentation, and by the solvent extraction process. (Id.) (citing
Defendant correctly points out that to state a cognizable claim for intentional misrepresentation, plaintiff must meet the heightened pleading standards of Rule 9 of the Federal Rules of Civil Procedure. (Doc. No. 13 at 23) (citing Helo, 2015 WL 4673890, at *3). Defendant argues that this heightened pleading standard also applies to plaintiff‘s UCL, CLRA, and FAL claims because they are likewise grounded in fraud. (Doc. No. 13 at 23) (citing Arabian v. Organic Candy Factory, No. 2:17-cv-05410-ODW-PLA, 2018 WL 1406608, at *3 (C.D. Cal. Mar. 19, 2018)). Defendant thus concludes that its purported compliance with AAFCO regulations; its disclosure of added vitamins, minerals, and nutrients; and the absence of any facts to suggest intent to defraud all combine to defeat plaintiff‘s intentional misrepresentation claim. (Id.)
In her opposition, plaintiff argues that the CDPH has not incorporated the AAFCO definition of “natural” into California law. (Doc. No. 19 at 11.) Plaintiff argues that the California Code of Regulations § 19005(m) does not address the term natural and “states only that ‘[t]he common names and definitions of other ingredients used in the processing of pet foods shall be those recognized in the Official Publication of Feed Control by the [AAFCO] and/or the U.S. Department of Agriculture.‘” (Id.) (quoting
Plaintiff also notes that defendant bears the burden of showing that she could not plausibly prove that a reasonable consumer would be deceived by the product packaging. (Id.) (citing Reid v. Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015)). In this regard, plaintiff argues that consumers do not generally understand that added vitamins and minerals are synthetic. (Doc. No 19 at 16) (citing Grimm v. APN, Inc., No. SACV 17-00356 JVS (JCGx), 2017 WL 6060624, at *3–4 (C.D. Cal. Nov. 20, 2017)). Plaintiff avers that regardless of whether the use of the term “All Natural” as a modifier is deceptive, “[q]uestions of how consumers interpret terms or phrases are factual inquiries best suited” for resolution not on a motion to dismiss but at a later stage of the litigation. (Doc. No. 19 at 17) (citing Hall v. Diamond Foods, Inc., No. C-14-2148 MC, 2014 WL 3779012, at *3 (N.D. Cal. July 31, 2014)).
Finally, plaintiff argues that her allegations in support of her fraud claims satisfy Federal Rule of Civil Procedure 9(b) for three reasons. First, because “plaintiffs may aver scienter . . . simply by saying scienter existed.” (Doc. No. 19 at 20) (quoting Odom v. Microsoft Corp., 486 F.3d 541, 554 (9th Cir. 2007)). Plaintiff contends that she has alleged defendant knew or recklessly disregarded the fact that its claims of selling “natural” products were deceptive, that
In its reply, defendant contends that the CDPH recognizes AAFCO‘s official publication as the definitive reference for pet food ingredients when not defined by California law. (Doc. No. 21 at 9.) Moreover, defendant argues that plaintiff has failed to plausibly allege that STPP, citric acid, and lactic acid are not natural, accusing plaintiff of pursuing a strategy of “file first, ask questions later.” (Id.) Defendant also again argues that no reasonable consumer would find the product label in question misleading and asks this court to find the reasoning by the district court in Hairston, 2012 WL 1893818 to be more persuasive than the reasoning espoused in Van Mourik, 2018 WL 1116715. (Doc. No. 21 at 11.) Ultimately, defendant asserts that courts have recognized the distinction between “all natural” labels reflecting qualifying disclaimers, as the labels for the Products here do, and those that do not. (Id. at 12.)
Defendant also reiterates in its reply that plaintiff‘s intentional misrepresentation, UCL, FAL, and CLRA claims all “sound in fraud and are subject to
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In California, processed pet food is subject to
could
be considered natural under the AAFCO guidelines, that does not mean it is always so. In the absence of a binding definition of “natural” in this context under California law, plaintiff‘s complaint is not subject to dismissal at the pleading stage where the court is to construe the allegations of the complaint in the light most favorable to the plaintiff. See Hishon, 467 U.S. at 73. Likewise, the court finds plaintiff‘s claim that a reasonable consumer would find the label “natural” to be misleading, even with the qualifying language “with added vitamins, minerals & nutrients,” to be plausible. Even if citric acid, lactic acid, and STPP could be made naturally, here plaintiff alleges that these ingredients were not produced naturally, and the court must accept those non-conclusory factual allegations of the complaint in the light most favorable to the plaintiff. See Friedman, 855 F.3d 1047; see also Gregoria v. The Clorox Co., No. 17-CV-03824-PJH, 2018 WL 732673, at *4–5 (N.D. Cal. Feb. 6, 2018) (reaching a similar conclusion in the context of “naturally derived” detergent); Organic Consumers Ass‘n v. Sanderson Farms, Inc., No. 17-CV-03592-RS, 2018 WL 922247, at *6 (N.D. Cal. Feb. 9, 2018) (reaching a similar conclusion in the context of “natural” poultry). The court agrees that questions regarding how consumers interpret terms or phrases on product labels are factual inquiries best suited for resolution at a later stage of the litigation and not on a motion to dismiss. Hall, 2014 WL 3779012, at *3.The court also finds that plaintiff‘s complaint satisfies
“A pleading is sufficient under rule 9(b) if it identifies the circumstances constituting fraud so that a defendant can prepare an adequate answer from the allegations.” Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989). That rule “may be relaxed as to matters within the opposing party‘s knowledge.” Id. While conclusory allegations with no “particularized supporting detail” do not suffice, the 9(b) “standard does not require absolute particularity or a recital of the evidence. . . . [A] complaint need not allege ‘a precise time frame,’ ‘describe in detail a single specific transaction’ or identify the ‘precise method’ used to carry out the fraud.” United States v. United Healthcare Ins. Co., 848 F.3d 1161, 1180 (9th Cir. 2016) (citing Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)) (other citations omitted).
Exhibit A to the complaint in this case includes a spreadsheet containing images and ingredient lists with respect to all the challenged products. (Doc. No. 1-1 at 33.) As to each of those products, plaintiff identifies the alleged misleading representations with sufficient particularity by producing full lists of ingredients with the allegedly non-natural ingredients in bold typeface. (Id.) Plaintiff also alleges that defendant made the misrepresentations knowingly and purposefully and that defendant was aware that some of the ingredients had been federally declared to be synthetic. (Id. at 4, 17.) As for the “why,” plaintiff alleges that defendant made misrepresentations because consumers perceive all-natural foods as better and healthier. (Id. at 17.) The allegations of the complaint clearly explain why these representations are deceptive and misleading. Because plaintiff has alleged the misrepresentations with sufficient particularity, she meets the
Defendant makes much of the fact that plaintiff uses outdated information in her complaint. Defendant argues that plaintiff‘s complaint cites to an old version of the Products and that the current version of the label no longer uses the term “All Natural” but instead only lists the Products as “Natural.” (Doc. No. 21 at 7–8.) Defendant asserts that plaintiff “may not re-plead her causes of action in her Opposition” to correct her complaint. (Id. at 8) (citing Strome v. DBMK Enters., Inc., No. C 14-2398 SI, 2014 WL 4437777, at *4 (N.D. Cal. Sept. 9, 2014)). Defendant also contends that plaintiff did not address the statement “with added vitamins, minerals, and nutrients” in her complaint and cannot post hoc justify her failure to do so, which
For these reasons, the court will deny defendant‘s motion to dismiss plaintiff‘s intentional misrepresentation cause of action.6
B. Plaintiff Has Standing to Seek Injunctive Relief
In opposing the pending motion to dismiss, plaintiff argues that she is subject to a risk of future harm sufficient to support her standing to seek injunctive relief. (Doc. No. 19 at 22.) Plaintiff seeks injunctive relief under the CLRA, the UCL, and the FAL. Because plaintiff‘s standing in this regard is crucial to her CLRA, UCL, and FAL claims, the court addresses the standing arguments before considering the pending motion to dismiss those specific claims.
Defendant argues that in order to seek injunctive relief a plaintiff must show a sufficient likelihood that she will be wronged in a similar way in the future and that the allegations of plaintiff‘s complaint do not do so here. (Doc. No. 13 at 25.) As noted, defendant contends that plaintiff seeks to enjoin defendant from using the representations “All Natural” in the future, but defendant contends that it no longer employs that representation on its labels at all. (Id. at 26.) Accordingly, defendant reasons there is no risk that plaintiff will be wronged in a similar way in the future. Defendant also argues that plaintiff is now well aware of the basis for its “natural” representations and therefore cannot claim she would be misled by those representations in the future. (Doc. No. 13 at 26) (citing Broomfield v. Craft Brew Alliance, Inc., 2017 WL 3838453, at *11–12 (N.D. Cal. Sept. 1, 2017)).
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In reply, defendant claims that nothing in the decision in Davidson “suggests the Ninth Circuit created a freestanding right to seek injunctive relief based on conduct that has ended.” (Doc. No. 21 at 15) (quoting Bruton v. Gerber Prod. Co., 2018 WL 1009257, at *7 (N.D. Cal. Feb. 13, 2018)). Defendant argues that because it no longer uses the “All Natural” label, plaintiff lacks standing and that because plaintiff alleges she would only purchase the Products in the future if defendant reformulated them, granting her requested injunctive relief requiring a change to its label would not in fact provide plaintiff relief. (Doc. No. 21 at 15.) Defendant urges the court to dismiss plaintiff‘s claims for injunctive relief under the CLRA, UCL, and FAL. The court finds defendant‘s arguments unpersuasive on this point.
As the Ninth Circuit has recognized, “[a] previously deceived consumer may have standing to seek an injunction against false advertising or labeling, even though the consumer now knows or suspects that the advertising was false at the time of the original purchase.” Davidson, 889 F.3d at 969; see also Moore v. Mars Petcare US, Inc., 966 F.3d 1007, 1021 n.13 (9th Cir. 2020). An actionable cognizable injury exists where a рlaintiff alleges that they cannot rely on defendant‘s labeling when deciding whether to purchase products in the future. Davidson, 889 F.3d at 970–71. The undersigned finds that plaintiff‘s allegations of future harm presented in the pending complaint fit squarely into the categories recognized by the Ninth Circuit. Moreover, even if defendant changed its label from reading “All Natural” to “Natural,” the court does not find at the motion to dismiss stage a sufficient basis upon which to conclude that all harmful
C. Violation of the California Legal Remedies Act (“CLRA“), Unfair Competition Law (“UCL“), and California Fair Advertising Law (“FAL“)
Claims brought under the CLRA, UCL, or the FAL are governed by the “reasonable consumer test.” Williams v. Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008). Additionally, the California Supreme Court recognized in Kasky v. Nike, Inc., 27 Cal. 4th 939, 950 (2002) that California‘s consumer protection laws prohibit not only advertising which is false, but also that which is either actually misleading or which has a capacity, likelihood, or tendency to deceive or cоnfuse the public. See Munning v. Gap, Inc., No. 16-cv-03804-TEH, 2016 WL 6393550, at *4 (N.D. Cal. Oct. 28, 2016). With that in mind, the court turns to the parties’ arguments regarding the sufficiency of plaintiff‘s claims as alleged.
1. Violation of California‘s False Advertising Law (“FAL“)
Defendant argues that a “plaintiff seeking equitable relief in California must establish that there is no adequate remedy at law available.” (Doc. No. 13 at 33) (quoting Munning v. Gap, Inc., 238 F. Supp. 3d 1195, 1203 (N.D. Cal. 2017)). Accordingly, defendant contends that in order to plead a cognizable UCL or FAL claim, plaintiff is required to allege facts showing that she has no adequate remedy at law. (Id.) (citing Heighley v. J.C. Penney Life Ins. Co., 257 F.
Plaintiff counters that defendant‘s argument conflicts with the plain words of
In reply, defendant asserts that plaintiff has pleaded her damages claims jointly with her equitable relief claims, and not in the alternative. (Doc. No. 21 at 19) (citing Grossman v. Schell & Kampeter, Inc., No. 2:18-cv-02344-JAM-AC, 2019 WL 1298997, at *7 (E.D. Cal. Mar. 21, 2019)). Defendant also responds to plaintiff‘s contention that she may not have an adequate remedy at law by arguing that where the claims pleaded may entitle a plaintiff to a remedy at law, equitable relief is unavailable. (Doc. No. 21 at 20) (citing Rhynes v. Stryker Corp., No. 10-5619 SC, 2011 WL 2149095, at *4 (N.D. Cal. May 31, 2011)).
Defendant‘s motion to dismiss both the FAL and the UCL claims hinges on the question of whether plaintiff may request injunctive relief in addition to her claims for legal remedies. The court concludes that plaintiff may do so. The controlling case in this circuit on this point is Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020). In Sonner, the Ninth Circuit held that a plaintiff “must establish that she lacks an adequate remedy at law before securing equitable restitution for past harm under the UCL and CLRA.” Id. at 844. Although it dealt only with equitablе claims for restitution premised on past harms, the undersigned concludes that the decision in Sonner did not “cabin the subject requirement to equitable claims for non-injunctive relief.” See IntegrityMessageBoards.com v. Facebook, Inc., No. 18-cv-05286, 2020 WL 6544411, at *5 (N.D. Cal. Nov. 6, 2020) (holding that the decision in Sonner relied on Supreme
The court concludes that plaintiff may pursue her equitable claims for injunctive relief to the extent they are premised on alleged future harm. Because plaintiff both has standing to seek injunctive relief and has sufficiently alleged that she has no adequate remedy at law, the court will deny defendant‘s motion to dismiss with respect to plaintiff‘s FAL claim.
2. Violation of California‘s Consumers Legal Remedies Act (“CLRA“)
Defendant next argues that plaintiff has failed to comply with the notice requirements mandated by the CLRA, and the court should therefore dismiss all damages claims arising from plaintiff‘s CLRA cause of action. (Doc. No. 13 at 33) (citing Munning v. Gap, Inc., 2016 WL 6393550, at *4). Defendant cites to
Defendant misconstrues the allegations of plaintiff‘s complaint. Although a plaintiff seeking damages under the CLRA must provide notice to the defendant under
3. Violation of California‘s Unfair Competition Law (“UCL“)
California‘s UCL prohibits “any unlawful, unfair or fraudulent business act or practice.”
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To advance a theory of fraud under the UCL, a plaintiff must allege facts showing that reasonable members of the public are likely to be deceived by the allegedly fraudulent conduct. See Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1169 (9th Cir. 2012). And “[t]o properly plead fraud with particularity under
Defendant argues that plaintiff does not adequately allege how the “All Natural” representations are false. (Doc. No. 13 at 27.) Particularly, defendant argues that plaintiff has failed to sufficiently allege falsity because she never “alleges that the Products fail to meet the AAFCO guidelines on labeling pet food ‘natural.‘” (Id.) (citing Chuang v. Dr. Pepper Snapple Grp., Inc., 2017 WL 4286577, at *4 (C.D. Cal. Sept. 20, 2017)). In short, defendant links its argument with regard to the insufficiency of the intentional misrepresentation allegations to its fraudulent prong argument.
In her opposition, plaintiff avers that “the natural representations are both false and misleading because the ingredients (including the non-vitamin ingredients challenged) are not natural.” (Doc. No. 19 at 23.)
In its reply, defendant argues that it is plaintiff‘s burden to plead a reasonable consumer would be misled and she has not done so. (Doc. No. 21 at 16.)
For the same reasons expressed as to why the motion to dismiss should be denied with regard to plaintiff‘s intentional misrepresentation claim, the court will likewise deny defendаnt‘s motion to dismiss plaintiff‘s UCL claim under the fraudulent prong.
b. Unfair Prong
Both parties agree that California courts employ three different tests in determining whether a business practice is “unfair” under the UCL: the balancing test, the FTC test, and the public policy test. See Allen v. Hyland‘s, Inc., No. CV 12-1150 DMG (MANx), 2016 WL
Defendant argues that plaintiff here fails to state a claim under the balancing test because plaintiff never alleges that: “1) the Products do not function as intended; 2) she has suffered any ‘substantially injurious effects’ or any ‘grave harm’ from using the Product; 3) she used the Product at all; 4) or any specific ill-effects.” (Doc. No.13 at 28.) Defendant also argues that plaintiff has failed to state a cognizable claim under the FTC test because she alleges an injury that she could have reasonably avoided. (Doc. No. 13 at 28) (citing Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. App. 4th 824, 839 (2006)). Finally, defendant argues that plaintiff fails to state a cognizable claim under the public policy test because her complaint “fails to ‘identify an actual policy based on a legal provision that the defendant violated.‘” (Doc. No. 13 at 28) (quoting Hodges v. Apple Inc., No. 13-cv-01128-WHO, 2013 WL 4393545, at *6 (N.D. Cal. Aug. 12, 2013)).
Plaintiff argues that defendant‘s contention that its conduct is not unfair presents a dispute of fact that cannot be resolved by way of a motion to dismiss. (Doc. No. 19 at 23–24) (citing Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1171 (9th Cir. 2012)). Plaintiff also argues that she nevertheless meets all three tests under the UCL. First, she contends that her complаint alleges that “defendant‘s conduct deceives consumers as to the nutritional characteristics of the Products and far outweighs any benefit to consumers.” (Doc. No. 19 at 24.) Second, she avers
In reply, defendant argues that plaintiff‘s reliance on the decision in Davis is misplaced because the Ninth Circuit also stated in that case that the court would “affirm a judgment of dismissal where the complaint fails to allege facts showing that a business practice is unfair.” (Dоc. No. 21 at 16) (quoting Davis, 691 F. 3d at 1170–71). Defendant reiterates that plaintiff‘s complaint with respect to this claim does not satisfy the balancing test, the FTC test, or the public policy test, because plaintiff has not adequately pleaded fraud. (Doc. No. 21 at 16–17.)
The court need not decide which definition of unfair conduct should apply in assessing the sufficiency of plaintiff‘s complaint because it concludes that what qualifies as “unfair” with respect to plaintiff‘s UCL claim involves a question of fact and plaintiff‘s complaint sufficiently alleges facts showing that a business practice is unfair. See Davis, 691 F.3d at 1170. Just like the plaintiffs in In re 5-hour ENERGY Mktg. & Sales Practice Litig., plaintiff here has alleged that defendant violated the unfair prong of the UCL by making misrepresentations on the label of the Products, and plaintiff tethers that claim to her FAL and CLRA claims. 2014 WL 5311272, at *26.8 As defendant points out, plaintiff‘s UCL claim is therefore based on the same purported conduct underlying her fraud claim because the CLRA and FAL claims must satisfy Rule 9(b). (Doc. No. 21 at 17) (citing Hadley v. Kellogg Sales Co., 243 F. Supp. 3d 1074, 1104–05 (N.D. Cal.
c. Unlawful Prong
“To state a claim under the unlawful prong of the UCL, a plaintiff must plead: (1) a predicate violation, and (2) an accompanying economic injury caused by the violation.” Shelton v. Ocwen Loan Servicing, LLC, No. 18-CV-02467-AJB-WVG, 2019 WL 4747669, at *10 (S.D. Cal. Sept. 30, 2019). “By proscribing any unlawful business practice, the UCL borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.” Alvarez v. Chevron Corp., 656 F.3d 925, 933 n.8 (9th Cir. 2011) (alterations and citations omitted). “Virtually any law—federal, state or local—can serve as a predicate for an action under [the UCL].” Hadley v. Kellogg Sales Co., 243 F. Supp. 3d 1074, 1094 (N.D. Cal. 2017) (quoting Smith v. State Farm Mut. Auto. Ins. Co., 93 Cal. App. 4th 700, 718 (2001)). Where an “unlawful” UCL claim sounds in fraud, it too must meet
Defendant moves to dismiss plaintiff‘s UCL claim on the ground that it fails under the unlawful prong because plaintiff fails to “allege that Defendant has violated any applicable law.” (Doc. No. 13 at 29.) On this point, defendant argues first that plaintiff‘s reference to 58 Fed. Reg. 2303, 2407 (Jan. 6, 1993) is irrelevant because that regulation only applies to human food products. (Id.) Second, defendant argues that plaintiff‘s reference to
In its reply, defendant argues only that because plaintiff‘s CLRA and FAL claims fail, her UCL unlawful claim fails as well. (Doc. No. 21 at 18.)
“[V]irtually any state, federal or local law can serve as the predicate for an action undеr section 17200.” People ex rel. Bill Lockyer v. Fremont Life Ins. Co., 104 Cal. App. 4th 508, 515 (2002) (citing Podolsky v. First Healthcare Corp. 50 Cal. App. 4th 632, 647 (1996). Just as in Zeiger, plaintiff here has “stated claims for violations of the CLRA and FAL, so these claims may serve as predicate violations for a claim under the UCL‘s ‘unlawful’ prong.” 304 F. Supp. 3d at 852. Other district courts in this circuit have recognized that “it is well established that a CLRA violation suffices as the predicate” to a UCL “unlawful” prong claim. MacDonald, 37 F. Supp. 3d at 1097 (citing Kowalsky v. Hewlett-Packard Co., 771 F. Supp. 2d 1156, 1161 (N.D. Cal. 2011)). The court finds no reason to depart from those holdings and concludes that a CLRA or FAL violation properly falls into the category of a state, federal, or local law for this purpose. Accordingly, defendant‘s motion to dismiss plaintiff‘s UCL claim brought under the “unlawful” prong will be denied.
D. Breach of Express Warranty
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Defendant contends that to allege facts identifying the exact terms of the warranty, a plaintiff must provide specifics about what the warranty statement was, and how and when it was breached. T & M Solar & Air Conditioning, Inc. v. Lennox Int‘l Inc., 83 F. Supp. 3d 855, 875 (N.D. Cal. 2015). Moreover, defendant argues that under
Plaintiff argues that an express warranty claim is adequately pleaded under California law when the plaintiff alleges that: (1) the seller‘s statement constitutes an affirmation of fact, a promise, or a description of goods; (2) the statement was part of the basis of the bargain; and (3) the warranty was breached. (Doc. No. 19 at 18) (citing
In reply, defendant contends that failure to plead the exact terms of the warranty defeats a breach of express warranty claim and that plaintiff‘s claim should be dismissed here due to her failure to so allege. (Doc. No. 21 at 12) (citing Hauck v. Advanced Micro Devices, Inc., No. 19-CV-00447-LHK, 2018 WL 5729234, at *7 (N.D. Cal. Oct. 29, 2018)).
Reliance “can be reasonably inferred from the tenor and totality of the allegations in the complaint.” Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135, 142 (1986). Here, plaintiff‘s complaint identified the purported warranties and plausibly alleges breach, reliance, and injury. (Doc. No. 1-1 at ¶ 31) (alleging that plaintiff paid more than she otherwise would
E. Breach of Implied Warranty
Defendant argues that plaintiff‘s implied warranty of merchantability claim asserted under
Plaintiff responds that because she has adequately alleged her express warranty claim, her implied warranty claim should likewise survive this motion to dismiss. (Doc. No. 19 at 19) (citing
In its reply, defendant argues that none of the aforementioned exceptions apply to plaintiff. (Doc. No. 21 at 13.) First, defendant argues that California appellate courts have not
The court finds plaintiff‘s arguments persuasive. First, both parties agree that the implied and express warranty claims are tied together for purposes of resolving the pending motion. (Doc. No. 13 at 22; Doc. No. 19 at 19.) Because the court finds that plaintiff has alleged a valid express warranty claim, so too does it conclude that plaintiff has asserted a cognizable claim for breach of an implied warranty. Second, the court agrees with the reasoning set forth by the district court in Van Mourik regarding vertical privity. There, the court acknowledged there is a vertical privity requirement, but held that it may be relaxed “when the plaintiff relies on written labels or advertisements of a manufacturer” . . . or when an express warranty is extended by the manufacturer.” 2018 WL 1116715, at *5 (citing Atkinson v. Elk Corp. of Texas, 142 Cal. App. 4th 212, 229 (2006)). Accordingly, just as in Van Mourik, because the alleged representations here are written advertisements and because plaintiff has stated a plausible claim for breach of express warranty, the vertical privity rule does not bar plaintiff‘s implied warranty claim. Defendant‘s motion to dismiss plaintiff‘s implied warranty claim will therefore also be denied.
F. Quasi-Contract/Unjust Enrichment/Restitution Under California Law
Plaintiffs may seek restitution on a quasi-contract theory where the defendant obtained a benefit from the plaintiff by fraud. Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350, 1370 (2010). Just as it has argued that plaintiff has not sufficiently alleged a misrepresentation or omission and therefore has not adequately pleaded fraud, defendant argues plaintiff‘s restitution claim should be dismissed. (Doc. No. 13 at 14) (citing Rojas-Lozano v. Google, Inc., 159 F. Supp. 3d 1101, 1120 (N.D. Cal. 2016)). Defendant also argues that under California law “‘there cannot be a claim based on quasi contract where there exists between the parties a valid express
Plaintiff argues that the Ninth Circuit has rejected the argument that she cannot state a claim for quasi-contract along with her separate claim for breach of express warranty. (Doc. No. 19 at 21) (citing Astiana v. Hain Celestial Grp., Inc., 783 F. 3d 753, 762 (9th Cir. 2015)). Plaintiff contends that instead ”
Defendant replies that although Rule 8 allows a plaintiff to state multiple claims, “the rule does not allow a plaintiff invoking state law to assert an unjust enrichment claim while also alleging an express contract.” (Doc. No. 21 at 15) (citing Smith, 2015 WL 9434768, at *9).
The court agrees with defendant that Rule 8 does not allow a plaintiff invoking state law to assert an unjust enrichment claim while also alleging an express contract. See Smith, 2015 WL 9434768; see also In re Facebook Privacy Litig., 791 F.Supp.2d 705, 718 (N.D. Cal. 2011) aff‘d, 572 Fed. App‘x 494 (9th Cir. 2014). A breach of an express warranty covers the same subject matter as a breach of an express contract. Smith, 2015 WL 9434768, at *10. Because plaintiff may not assert a quasi-contract claim while also alleging an express warranty claim, the court will grant defendant‘s motion to dismiss plaintiff‘s quasi-contract restitution claim.
G. Punitive Damages
Plaintiff requests punitive damages in her prayer for relief. (Doc. No. 1-1 at 30.) Defendant moves to dismiss that punitive damages claim because “California federal courts require a complaint seeking punitive damages to include facts sufficient to support its punitive damages claim.” (Doc. No. 13 at 34) (citing Young Am.‘s Found. v. Napolitano, No. 17-cv-02255-MMC, 2018 WL 1947766, at *12 (N.D. Cal. Apr. 25, 2018)). Defendant also contends that punitive damages are not available under either the UCL or FAL. (Doc. No. 13 at 34) (citing In re Wal-Mart Stores, Inc. Wage and Hour Litig., 505 F. Supp. 2d 609, 620 (N.D. Cal. 2007)). Neither, defendant argues, are punitive damages available for breach of express warranty, breach
In opposition, plaintiff argues that a request for punitive damages is not a claim and is not the proper subject of a motion to dismiss. (Doc. No. 19 at 31) (citing Shimy v. Wright Med. Tech., Inc., No. 2:14-CV-04541-CAS (RZx), 2014 WL 3694140, at *4 (C.D. Cal. July 23, 2014)). Plaintiff also contends that discovery will “reveal the identities of any responsible corporate officers, directors, or managing agents,” in response to defendant‘s assertion that she did not properly make these allegations in her complaint. (Doc. No. 19 at 31.)
In its reply, defendant asserts that courts routinely dismiss punitive damages claims where the plaintiff failed to plead support for such damagеs. (Doc. No. 21 at 21) (citing Anderson v. United States, 2018 WL 4242344, at *2 (E.D. Cal. Sept. 6, 2018)). Because plaintiff does not dispute that punitive damages are not available under the UCL, FAL, or breach of warranty, defendant argues that the court should dismiss those damages claims. (Id.) Finally, defendant argues that plaintiff cannot rely on discovery to reveal the identifies of any responsible corporate agents, but must plead that an officer, director, or managing agent of defendant committed an act of oppression, fraud, or malice. (Id.) (citing In re Yahoo! Inc. Customer Data Sec. Breach Litig.,
Punitive damages are generally not available under the UCL or FAL. See In re Wal-Mart Stores, Inc. Wage and Hour Litig., 505 F. Supp. 2d 620; see also Petkevicius v. NBTY, Inc., No.: 3:14-cv-02616-CAB-(RBB), 2017 WL 1113295, at *10 (S.D. Cal. Mar. 24, 2017). Moreover, punitive damages are not available under California law for breach of express or implied warranty. See Goel v. Coalition America Holding Company Inc, No. CV 11-2349 GAF (Ex), 2011 WL 13128300, at *9 (C.D. Cal. July 5, 2011) (citing Major v. W. Home Ins. Co., 169 Cal. App. 4th 1197, 1224 (2009)). Plaintiff appears to concede these points. Accordingly, plaintiff‘s only potential punitive damages claims come under her intentional misrepresentation claim and her CLRA claim.
First, because plaintiff‘s CLRA claim seeks only injunctive relief, any claim for punitive damages in connection with that claim is moot. Second, defendant correctly argues that plaintiff has failed to identify any officer, director, or managing agent who committed an act of oppression, fraud, or malice in the allegations of her complaint and therefore cannot seek punitive damages in connection with her intentional misrepresentation claim. Where a plaintiff proves that the defendant has been guilty of fraud or malice, that plaintiff may recover punitive damages.
Accordingly, plaintiff‘s claims for punitive damages are dismissed with leave to amend only in connection with her intentional misrepresentation claim.
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For the reasons set forth above,
- Defendant‘s motion to dismiss (Doc. No. 13) is granted in part and denied in part as follows:
- Plaintiff‘s seventh cause of action for breach of quasi-contract is dismissed without leave to amend;
- Plaintiff‘s requests for punitive damages are stricken with leave to amend only in connection with her intentional misrepresentation claim;
- This action now proceeds on plaintiff‘s intentional misrepresentation, express warranty, implied warranty, CLRA, UCL, and FAL claims; and
- Any amended complaint shall be filed within twenty-one (21) days from the issuance of this order.
IT IS SO ORDERED.
Dated: December 30, 2020
Dale A. Drozd
UNITED STATES DISTRICT JUDGE